Table source: Office for National Statistics

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Supplementary analysis

The seasonally adjusted index of production fell by 1.0 per cent in April 2012 compared with April 2011. This is the 14th consecutive monthly fall on the same month a year ago.

The seasonally adjusted index of production remained unchanged between March 2012 and April 2012. The electricity, gas, steam & air conditioning sector rose by 13.6 per cent. This increase was offset by the mining & quarrying sector, which fell by 5.7 per cent and the manufacturing sector, which fell by 0.7 per cent. The water & waste management sector remained unchanged.

Manufacturing

The seasonally adjusted index of manufacturing fell by 0.3 per cent in April 2012 compared with April 2011. Eight manufacturing sub sectors fell with five rising. The largest contributions to the month on same month a year ago fall in manufacturing output were the manufacture of food, drink & tobacco industries, which fell by 5.7 per cent, followed by other manufacture & repair, which fell by 9.5 per cent. In contrast, the largest upward contribution came from the manufacture of transport equipment industries, which rose by 8.8 per cent.

Seasonally adjusted manufacturing output fell by 0.7 per cent in April 2012 compared with March 2012. Seven manufacturing sub sectors fell with six rising. The largest contributions to the month on month fall in manufacturing output were the manufacture of basic pharmaceutical products & preparations, which fell by 6.0 per cent, followed by other manufacturing & repair, which fell by 5.1 per cent. In contrast, the manufacture of computer, electronic & optical products industries rose by 8.1 per cent.

Mining & quarrying

Output of the mining & quarrying industries fell by 15.0 per cent in April 2012 compared with April 2011. This was the 19th consecutive monthly fall on the same month a year ago. The biggest contributor to the decrease was from the extraction of oil & gas which fell by 18.2 per cent. Between March 2012 and April 2012 mining & quarrying fell by 5.7 per cent, with oil & gas extraction falling by 6.4 per cent.

Oil & gas production would have been higher in April had it not been for the shutdown of the Elgin platform in the North Sea because of a gas leak.

Energy supply

Energy supply output in April 2012 rose by 12.6 per cent compared with April 2011 with electricity supply rising by 10.2 per cent and gas supply rising by 22.3 per cent. Between March 2012 and April 2012 energy output supply rose by 13.6 per cent. Electricity supply rose by 9.3 per cent and gas supply rose by 32.1 per cent.

The UK mean temperature in April was below average and the coldest April since 1989 when energy supply output between March and April increased by 16.4 per cent. Unusually, April was colder than March (the last time this occurred was in 1998). Most of the UK was much wetter than normal, making it provisionally the wettest April on record.

Water & waste management

Between April 2011 and April 2012 water & waste management output rose by 1.1 per cent.

Water & waste management remained unchanged in April 2012 compared with March 2012.

GDP Impact

There are no revisions to GDP arising from this release of IoP data.

Production in detail

The Index of Production (IoP) measures the output of the production industries in the United Kingdom. Figures are adjusted for seasonal variations unless otherwise stated and the reference year is 2008 = 100. For an explanation of the terms used in this bulletin, please see the Background Notes section. Care should be taken when using the month on month growth rates due to their volatility. An assessment of the quality of the production statistics is available in the background notes.

Headline growth rates and contributions to the Index of Production April 2012

Description

% of production

Month on same month a year ago growth (%)

Contribution to production (% points)

Month on previous month growth (%)

Contribution to production (% points)

IoP

100.0

-1.0

-0.97

0.0

0.05

Sector B

16.4

-15.0

-2.03

-5.7

-0.70

Division 06

14.1

-18.2

-2.02

-6.4

-0.63

Sector C

66.6

-0.3

-0.18

-0.7

-0.50

Sector D

9.3

12.6

1.15

13.6

1.24

Sector E

7.7

1.1

0.09

0.0

0.00

Table source: Office for National Statistics

Table notes:

Headline figures for the Index of Production are:

Total Index of Production; Sector B Mining and quarrying; and within this Division 06 Oil and gas extraction; Sector C Manufacturing; Sector D Electricity, gas, steam and air conditioning; and Sector E Water supply, sewerage and waste management.

Individual contributions may not sum to the total due to rounding.

The Index of Production is made up four sectors: Mining and quarrying; Manufacturing; Electricity, gas, steam and air conditioning; and Water supply, sewerage and waste management. The larger the percentage contribution, the more likely the impact on the overall manufacturing growth rate will be significant.

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Manufacturing growth rates and contributions to the Index of Production April 2012

Sub-sector

Summary Description

% of production

Month on same month a year ago growth (%)

Contribution to production (% points)

Month on previous month growth (%)

Contribution to production (% points)

CA

Food, beverages and tobacco

11.2

-5.7

-0.78

-1.7

-0.22

CB

Textiles and leather products

2.1

-2.7

-0.06

1.2

0.03

CC

Wood, paper and printing

5.9

-3.5

-0.20

-1.1

-0.06

CD

Coke and petroleum

0.4

-7.1

-0.03

0.5

0.00

CE

Chemical Products

5.5

-0.9

-0.05

0.6

0.03

CF

Pharmaceutical Products

4.9

-3.0

-0.13

-6.0

-0.28

CG

Rubber and plastic products

5.0

-5.1

-0.24

-1.8

-0.08

CH

Metal products

9.3

2.8

0.24

-1.1

-0.10

CI

Computer, electronic & optical

4.9

6.2

0.29

8.1

0.38

CJ

Electrical equipment

2.2

16.5

0.33

2.4

0.06

CK

Machinery and equipment

4.4

6.4

0.31

2.2

0.11

CL

Transport equipment

5.8

8.8

0.65

-1.1

-0.09

CM

Other manufacturing & repair

4.9

-9.5

-0.52

-5.1

-0.27

Table source: Office for National Statistics

Table notes:

Individual contributions may not sum to the total due to rounding.

Manufacturing consists of 13 sub-sectors listed above with the percentage of the total they account for. The larger the percentage contribution, the more likely the impact on the overall manufacturing growth rate will be significant.

the largest contributor to the 15.0 per cent month on same month a year ago fall in overall mining & quarrying was approximately 15.0 percentage points from the extraction of crude petroleum & natural gas.

Manufacturing

The seasonally adjusted index of manufacturing in April 2012 fell by 0.3 per cent compared with April 2011. In detail:

output decreased in eight of the 13 manufacturing sub-sectors and rose in five,

the largest contributions to the decrease in output were in the manufacture of food, drink & tobacco products, which fell by 5.7 per cent, and in other manufacture & repair, which fell by 9.5 per cent,

within the manufacture of food, drink & tobacco products the main fallers were in alcoholic beverages, which decreased by 19.2 per cent, and other food products, which fell by 6.6 per cent,

within other manufacturing & repair the main falls were in repair & installation of machinery & equipment, which fell by 12.2 per cent and the manufacture of furniture, which fell by 11.0 per cent,

the largest contributors to the 0.3 per cent month on same month a year ago fall in overall manufacturing were approximately 1.1 percentage points from food drink & tobacco products and approximately 0.8 percentage points from other manufacturing & repair. Among the sectors increasing, the manufacture of transport equipment made the largest contribution, approximately 0.9 percentage points.

Energy supply

The seasonally adjusted index of the electricity, gas, steam & air conditioning supply industries in April 2012 rose by 12.6 per cent compared with April 2011. The main movements were:

electric power generation, transmission & distribution, which increased by 10.2 per cent,

manufacture of gas & gas distribution, which increased by 22.3 per cent,

the largest contributor to the 12.6 per cent month on same month a year ago rise in overall electricity, gas, steam & air conditioning supply was approximately 8.1 percentage points from electric power generation, transmission & distribution and approximately 4.5 percentage points from the manufacture of gas & gas distribution.

Water supply & waste management

The seasonally adjusted index of the water supply, sewerage & waste management industries in April 2012 rose by 1.1 per cent compared with April 2011. The main movements were:

remediation activities & other waste management services, which increased by 3.4 per cent,

water collection, treatment & supply, which decreased by 3.6 per cent,

the largest contributor to the 1.1 per cent month on same month a year ago rise was 2.4 percentage points from waste collection, treatment & disposal activities.

Revisions

This release conforms to the standard revisions policy for National Accounts. In this release there are no periods open to revision.

The Index of Production release for May 2012 will have a revisions period back to January 1997. This will be in line with the open revisions period for the 2012 Blue Book publication.

Impact on GDP

There are no revisions to GDP arising from this release of IoP data.

Summary statistics

The monthly United Kingdom (UK) Index of Production (IoP) provides a timely indicator of growth in the output of production industries at constant prices. The IoP is a key economic indicator and one of the earliest short-term measures of economic activity and shares exactly the same industry coverage as the corresponding quarterly series within UK Gross Domestic Product (GDP).
The main output is a seasonally adjusted estimate of total production and broad sector groupings of mining & quarrying, manufacturing, energy and water supply & sewerage. In general, seasonally adjusted output estimates are available down to the National Accounts Supply Use Table (SUT) level.

Output estimates are calculated by taking value estimates and adjusting them to remove the impact of price changes, or by using direct volume estimates. The total IoP estimate and various breakdowns are widely used in private and public sector institutions, particularly the Bank of England and Her Majesty’s Treasury, to assist in informed policy and decision making.

As part of the celebrations for the Queen's Diamond Jubilee there are changes to bank holidays in May and June 2012. The late May bank holiday moves into June, and there is an additional day's holiday. The change to the holidays will count as a statistical special event in line with ONS's policy on Special Events. The event is not regular, so there will not be an adjustment to account for it as part of the seasonal adjustment process. Users are therefore likely to see an effect related to an additional working day in May and two fewer working days in June in the seasonally adjusted series. ONS will include commentary with releases as usual, including commentary specifically to help users with the interpretation of statistics in these two months. Nevertheless, caution should be taken when interpreting the movements in affected outputs that involve May and June 2012.

Upcoming changes

The index of Production release for May 2012 will have a revisions period back to January 1997. This will be in line with the open revisions period for the 2012 Blue Book publication.

Code of Practice for Official Statistics

National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

Under the terms of the Open Government Licence and UK Government Licensing Framework, anyone wishing to use or re-use ONS material, whether commercially or privately, may do so freely without a specific application for a licence, subject to the conditions of the OGL and the Framework.

For further information, contact the Office of Public Sector Information, Crown Copyright Licensing and Public Sector Information, Kew, Richmond, Surrey, TW9 4DU.

This Statistical Bulletin gives details of the index of output of the production industries in the United Kingdom. Index numbers of output in this Statistical Bulletin are on the base 2008=100 and are classified to the 2007 Standard Industrial Classification (SIC). The production industries, which accounted for 15.4 per cent of gross domestic product in 2008, cover mining and quarrying (Sector B), manufacturing (Sector C), gas and electric (Sector D), and water supply and sewerage (Sector E).

Interpreting the data

The non-seasonally adjusted series contain elements relating to the impact of the standard reporting period, moving holidays and trading day activity. When making comparisons it is recommended that users focus on seasonally adjusted estimates as these have the seasonal effects and systematic calendar related components removed.
Figures for the most recent months are provisional and subject to revision in light of (a) late responses to surveys and administrative sources and (b) revisions to seasonal adjustment factors which are re-estimated every month and reviewed annually (changes from the latest review are included in this release).

Definitions and explanations

Definitions found within the main statistical bulletin:

Chained volume measure
An index number from a chain index of quantity. The index number for the reference period of the index may be set equal to 100 or to the estimated monetary value of the item in the reference period.

Index Number
A measure of the average level of prices, quantities or other measured characteristics relative to their level for a defined reference period or location. It is usually expressed as a percentage.

Seasonally adjusted
Seasonal adjustment aids interpretation by removing effects associated with the time of the year or the arrangement of the calendar, which could obscure movements of interest.

Use of the data

The IoP is a key economic indicator and one of the earliest short-term measures of economic activity. The main output is a seasonally adjusted estimate of total production and broad sector groupings of mining & quarrying, manufacturing, energy and water supply & sewerage. The total IoP estimate and various breakdowns are widely used in private and public sector institutions, particularly the Bank of England and Her Majesty’s Treasury, to assist in informed policy and decision making.

The Index of Production uses a variety of different data from sources which are produced on either a quarterly or monthly basis.

Most of the indicators are derived using current price turnover deflated by a suitable price index. This includes the Monthly Business Survey (MBS) data; an ONS short term survey on different sectors of the economy. It is one of the main data sources used in the compilation of the Index of Production.

Seasonal adjustment

The index numbers in this Statistical Bulletin are all seasonally adjusted. This aids interpretation by removing annually recurring fluctuations, for example, due to holidays or other regular seasonal patterns. Unadjusted data are also available.

Seasonal adjustment removes regular variation from a time series. Regular variation includes effects due to month lengths, different activity near particular events such as shopping activity before Christmas, and regular holidays such as the May bank holiday. Some features of the calendar are not regular each year, but are predictable if we have enough data - for example the number of certain days of the week in a month may have an effect, or the impact of the timing of Easter. As Easter changes between March and April we can estimate its effect on time series and allocate it between March and April depending on where Easter falls. Estimates of the effects of day of the week and Easter are used respectively to make trading day and Easter adjustments prior to seasonal adjustments.

Although leap years only happen every four years, they are predictable and regular and their impact can be estimated. Hence, if there is a leap year effect, it is removed as part of regular seasonal adjustment.

Deflation

It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values.

All series, unless otherwise quoted, are measured at constant basic prices. Deflators adjust the value series to take out the effect of price change to give the volume series.

Quality

Basic quality information

A common pitfall in interpreting data is that expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade off between timeliness and accuracy. Early estimates are based on incomplete data.

Very few statistical revisions arise as a result of ‘errors’ in the popular sense of the word. All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques, or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures, and such mistakes are made quite clear when they do occur.

Figures for the most recent months are provisional and subject to revision in light of (a) late responses to the Monthly Business Survey MBS and (b) revisions to seasonal adjustment factors which are re-estimated every period.

In the next bulletin, which will contain figures for May 2012 and will be published on 10 July 2012, there will be a revisions period back to January 1997. This will be in line with the open revisions period for the 2012 Blue Book publication

One indication of the reliability of the key indicators in this bulletin can be obtained by monitoring the size of revisions. The table below is based on the revisions which have occurred over the last five years. Please note that these indicators only report summary measures for revisions. The revised data may, themselves, be subject to sampling or other sources of error.

The table below presents a summary of the differences between the first estimates published between May 2006 and April 2011 and the estimates published 12 months later.

Revisions, April 2012

Revisions between first publication and estimates produced 12 months later (percentage points)

Growth rates

Value in latest period

Average revision

Absolute average revision

Production - 3 month

-0.1

-0.13

0.29

Manufacturing - 3 month

-0.6

-0.14

0.33

Production - 1 month

0.0

-0.09

*

0.26

Manufacturing - 1 month

-0.7

-0.06

0.29

Table source: Office for National Statistics

Table notes:

Averages shown are over the most recent five years. The absolute average is the average over the most recent five years without regard to sign.

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A statistical test has been applied to the average revisions to find out if they are statistically significantly different from zero. An asterisk (*) indicates if a figure has been found to be statistically significant from zero.

The table uses historical data for the most recent 60 months, comparing the estimate at first publication with the estimate as published 12 months later. The numbers which underpin these averages will include normal changes due to late data and re-seasonal adjustment, but also significant methodological changes, the most recent being the introduction of the 2007 Standard Industrial Classification in October 2011.

A complete set of series in the Statistical Bulletin are available to download free of charge on the Data section of the ONS website. Alternatively, for low-cost tailored data, call Online Services on 0845 601 3034 or email tailored@statistics.gov.uk.

Accessing data

The complete run of data in the tables of this Statistical Bulletin is also available to view and download in electronic format free of charge using the ONS Time Series Data service. Users can download the complete bulletin in a choice of zipped formats, or view and download their own selections of individual series.